The Gap, Nike, and Levi Strauss actually have comparatively large inspection teams for U.S. companies, but "large" in this sense means about 90 inspectors for the Gap—the number of inspections-per-plant for the Gap in 2006 still worked out to about one every six months.

The current inspection process has only been around since the early to mid-90s, and clearly the current level of inspections aren't working:

A forthcoming study from the Worker Rights Consortium examined 50 factories serving these top companies and found major problems at each location, like verbal abuse, lack of access to drinking water and bathrooms, and the inability for workers to organize. In 84 percent of those factories, workers didn't understand how their salary was determined.

One interesting finding is those same conditions don't build trust for consumers as quickly, "suggesting that they have now come to expect these attributes in day-to-day business."

However, their trust can be severely eroded when these baseline requirements are not met, with potentially dramatic consequences for business. For example, a massive 63% of European consumers would be concerned about buying a product or service if a company was unethical; 56% would lose trust with bad customer service, and 59% would react negatively to outdated products and services.

The same holds true for issues of security—the study found that customers are willing to move to a competitor if they offer higher security, but they don't feel it should be treated as an "added value" that justifies higher fees.

As an aside, it's interesting to compare industry reputations across the pond: banks are among the most trusted in Europe, while telecommunications and airlines are the least trusted.

We wonder how much longer it will be before shareholders start to realize that a healthy company is dependent upon meeting these requirements as much as meeting quarterly sales goals—perhaps it's already begun with the recent shareholder suit against Mattel.

"Unisys study reveals what erodes consumer trust" [Computing SA]
(Photo: Getty)